New ISA Scheme to help first time buyers
By Russell Jervis, Managing Director at haart.
The average age of a first time buyer in the UK has been steadily rising for some years. Whilst the government’s Help-To-Buy scheme has helped challenge this, for many, the sheer size of the deposit required remains a massive hurdle to property ownership.
Without the help of ‘the bank of mum and dad’ buying a house for many is simply a pipe dream with properties in London and the South East in particular remaining out of reach. With this in mind the government’s announcement on the creation of an ISA specifically designed for first time buyers is to be welcomed. As well as interest on savings, the government will also top-up the ISA. The maximum annual savings allowance has been set at £12,000, with the government topping this up by a further 25%, taking the total annual pot to £15,000.
This ISA is only available to those who haven’t bought a property before, which means buy-to-let landlords won’t be able to take advantage of the scheme. It’s great news for first time buyers and because of the annual savings cap I don’t believe there will be a runaway surge in property prices. That said, the government will need to work with property builders to ensure an increased supply of houses if they are serious about addressing the long term issues in the property market - and the needs of future generations.
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